ACHE BOARD OF GOVERNORS (BOG)
PRACTICE EXAMINATION 2026/2027
LATEST EXAM UPDATE Q&A
Section 1: Governance & Organizational Structure
1. Who has the ultimate fiduciary and legal responsibility for a healthcare
organization?
o A. Chief Executive Officer (CEO)
o B. Medical Executive Committee
o C. Board of Directors / Governing Body
o D. Chief Financial Officer (CFO)
o Answer: C. Board of Directors / Governing Body
2. According to legal and administrative tradition, what basic requirement
must guide actions of healthcare governing boards?
o A. Maximization of shareholder profit in all circumstances
o B. The actions of the board must be reasonable and prudent
o C. Unanimous voting on all operational expenditures
o D. Absolute deference to the medical staff executive committee
o Answer: B. The actions of the board must be reasonable and
prudent
3. Internal members of a healthcare organization's governing body typically
include which individuals?
, o A. The Board Chair, Community Mayor, and Chief Nursing
Officer
o B. The CEO, Chief Medical Officer (Medical Director), and CFO
o C. External legal counsel, external auditor, and primary donors
o D. Representatives from local health departments and labor unions
o Answer: B. The CEO, Chief Medical Officer (Medical
Director), and CFO
4. What is the primary foundational role of a healthcare governing body?
o A. Managing day-to-day clinical department operations
o B. Negotiating individual managed care contracts with third-party
payers
o C. Setting objectives and developing policy to guide the
organization in achieving its mission
o D. Selecting clinical protocols for emergency care
o Answer: C. Setting objectives and developing policy to guide
the organization in achieving its mission
5. What primary advantage does the corporate form of organization offer a
healthcare provider?
o A. Exemption from all federal labor laws
o B. Immunity from medical malpractice lawsuits
o C. Limited liability for its owners/investors
o D. Guaranteed profitability regardless of market share
o Answer: C. Limited liability for its owners/investors
,6. Which document outlines the foundational authority, purpose,
governance structure, and committee functions of a healthcare facility?
o A. The Corporate Bylaws
o B. The Strategic Marketing Plan
o C. The Employee Handbook
o D. The Utilization Review Manual
o Answer: A. The Corporate Bylaws
7. In a non-profit healthcare organization, how are surplus revenues (net
income) utilized?
o A. Distributed as cash dividends to board members
o B. Retained and reinvested into the organization to fulfill its tax-
exempt mission
o C. Taxed at standard corporate dividend rates
o D. Transferred directly to municipal government treasury accounts
o Answer: B. Retained and reinvested into the organization to
fulfill its tax-exempt mission
8. When two independent healthcare organizations meet to explore a joint
venture for a specialized program, what legal issue should counsel review
first?
o A. Copyright law violations
o B. Potential antitrust law violations
o C. International trade agreements
o D. OSHA facility compliance
, o Answer: B. Potential antitrust law violations
9. In the past, hospitals were often considered less effective than physician
organizations in direct political lobbying primarily because:
o A. Legislators refuse to meet with healthcare administrators
o B. Federal tax codes prohibit hospitals from spending any funds on
public affairs
o C. Hospitals as corporate entities do not directly cast individual
votes
o D. Physician organizations have higher total revenues than
healthcare systems
o Answer: C. Hospitals as corporate entities do not directly cast
individual votes
10.What is the board's primary responsibility regarding the Chief Executive
Officer?
o A. Approving the CEO's daily work schedule
o B. Selecting, evaluating, and setting compensation for the CEO
o C. Managing the CEO's direct reports and administrative staff
o D. Approving all routine travel expense reports submitted by the
CEO
o Answer: B. Selecting, evaluating, and setting compensation for
the CEO
Section 2: Healthcare Management, Leadership & Human Resources
11.According to the ACHE Code of Ethics, how should a healthcare
executive handle potential or actual conflicts of interest?
PRACTICE EXAMINATION 2026/2027
LATEST EXAM UPDATE Q&A
Section 1: Governance & Organizational Structure
1. Who has the ultimate fiduciary and legal responsibility for a healthcare
organization?
o A. Chief Executive Officer (CEO)
o B. Medical Executive Committee
o C. Board of Directors / Governing Body
o D. Chief Financial Officer (CFO)
o Answer: C. Board of Directors / Governing Body
2. According to legal and administrative tradition, what basic requirement
must guide actions of healthcare governing boards?
o A. Maximization of shareholder profit in all circumstances
o B. The actions of the board must be reasonable and prudent
o C. Unanimous voting on all operational expenditures
o D. Absolute deference to the medical staff executive committee
o Answer: B. The actions of the board must be reasonable and
prudent
3. Internal members of a healthcare organization's governing body typically
include which individuals?
, o A. The Board Chair, Community Mayor, and Chief Nursing
Officer
o B. The CEO, Chief Medical Officer (Medical Director), and CFO
o C. External legal counsel, external auditor, and primary donors
o D. Representatives from local health departments and labor unions
o Answer: B. The CEO, Chief Medical Officer (Medical
Director), and CFO
4. What is the primary foundational role of a healthcare governing body?
o A. Managing day-to-day clinical department operations
o B. Negotiating individual managed care contracts with third-party
payers
o C. Setting objectives and developing policy to guide the
organization in achieving its mission
o D. Selecting clinical protocols for emergency care
o Answer: C. Setting objectives and developing policy to guide
the organization in achieving its mission
5. What primary advantage does the corporate form of organization offer a
healthcare provider?
o A. Exemption from all federal labor laws
o B. Immunity from medical malpractice lawsuits
o C. Limited liability for its owners/investors
o D. Guaranteed profitability regardless of market share
o Answer: C. Limited liability for its owners/investors
,6. Which document outlines the foundational authority, purpose,
governance structure, and committee functions of a healthcare facility?
o A. The Corporate Bylaws
o B. The Strategic Marketing Plan
o C. The Employee Handbook
o D. The Utilization Review Manual
o Answer: A. The Corporate Bylaws
7. In a non-profit healthcare organization, how are surplus revenues (net
income) utilized?
o A. Distributed as cash dividends to board members
o B. Retained and reinvested into the organization to fulfill its tax-
exempt mission
o C. Taxed at standard corporate dividend rates
o D. Transferred directly to municipal government treasury accounts
o Answer: B. Retained and reinvested into the organization to
fulfill its tax-exempt mission
8. When two independent healthcare organizations meet to explore a joint
venture for a specialized program, what legal issue should counsel review
first?
o A. Copyright law violations
o B. Potential antitrust law violations
o C. International trade agreements
o D. OSHA facility compliance
, o Answer: B. Potential antitrust law violations
9. In the past, hospitals were often considered less effective than physician
organizations in direct political lobbying primarily because:
o A. Legislators refuse to meet with healthcare administrators
o B. Federal tax codes prohibit hospitals from spending any funds on
public affairs
o C. Hospitals as corporate entities do not directly cast individual
votes
o D. Physician organizations have higher total revenues than
healthcare systems
o Answer: C. Hospitals as corporate entities do not directly cast
individual votes
10.What is the board's primary responsibility regarding the Chief Executive
Officer?
o A. Approving the CEO's daily work schedule
o B. Selecting, evaluating, and setting compensation for the CEO
o C. Managing the CEO's direct reports and administrative staff
o D. Approving all routine travel expense reports submitted by the
CEO
o Answer: B. Selecting, evaluating, and setting compensation for
the CEO
Section 2: Healthcare Management, Leadership & Human Resources
11.According to the ACHE Code of Ethics, how should a healthcare
executive handle potential or actual conflicts of interest?
